Sunday, February 26, 2017

The increased diversity of PE firms and growing focus of the industry has led the PEGCC to expand its organizational purpose. The PEGCC has been re-named the American Investment Council (AIC), and in its expanded mission, the AIC seeks to “advance access to capital, job creation, retirement security, innovation, and economic growth in the United States by promoting responsible long-term investment.”
“This is a major step forward for our organization as we work to promote private equity and serve as a resource to our member firms,” said AIC President and CEO Mike Sommers. “The American Investment Council represents the full spectrum of private investment and the value it creates for every state in our country. It is more than a new name, it is a renewed commitment to be the voice for private equity in the United States.”
“These changes reflect the broader focus of our member firms post-financial crisis,” said AIC Chairman of the Board and KKR Member Ken Mehlman. “Today, our industry is enhancing retirement security, partnering to grow companies, building critical infrastructure, and providing capital to Main Street without systemic risk.”

Bring out the All American band, preferable those with the courage to continue playing as the unsinkable ship goes under.

The least readable line in the CBO graph is the one showing the income growth of the top 1% of Americans. It's the faint blue line showing a rising series of peaks and higher valleys. The other 99% of Americans are in a darker series of flat lines with a very slight incline.

Can you make out the number at the end of the light blue top 1% line? I bolded it in red for those who can't see the richest American's income grew 192%.

I added the founding dates of top private equity underwriters, the people getting the massive income growth while enacting strategies that held down pay for the other 99%, at least those employed by PEU owned companies.

Private equity underwriters became ubiquitous the last two decades. Their growth continues:

Private equity multiplied like a virus which eroded incomes in the wider economy. It also turned America's two party system into one, where political parties Red and Blue love PEU.

Most of the country lives in a financial flood plain where economic shocks can quickly put many underwater. The top 1% keep getting to higher and higher ground. They'll be warm and dry when the next crisis of their own making comes around.

Update 3-3-17: Wealth grew for those at the top starting in 2000 while employment conditions in the U.S. remain bleak.

Update 4-2-17: These trends occurred under 16 years of Blue Team White House (Clinton and Obama) and 20 years of Red Team Presidents (Reagan, Bush 1 and Bush 2). Both Political Houses aligned their parties with the PEU class.

Update 4-15-17: Carlyle's Sandra Horbach described how our world became PEU.

Thursday, February 23, 2017

The Carlyle Group said on Feb. 23 it raised $2.5 billion
for its latest distressed and special-situations fund, Carlyle
Strategic Partners IV. The fund is more than triple the size of
the alternative asset manager's previous such offering, a $700
million fund that closed in 2011.

"The current global economic and market environment is
laying the groundwork for solid distressed control and
turnaround investment opportunities," Ian Jackson, managing
director and co-head of Carlyle Strategic Partners, said in a
statement.

Carlyle knows because it has at least one distressed affiliate, Philadelphia Energy Solutions (PES). Moody's downgraded PES debt in November. Sponsor "debt for dividend" moves can be threatening to a company's financial health.

Despite the downturn, Carlyle Group
and its partner, Sunoco parent Energy Transfer Partners, have done well.
The partnership banked hundreds of millions from the refinery in
dividend-style payouts that were funded in part from a loan that
continues to weigh on the company, Reuters reported last month.

In total,
between 2013 and 2015 payouts and tax advances to the partnership
reached $480.9 million, all but guaranteeing Carlyle's venture would be
profitable.

Carlyle's PES has a $550 million term loan due April
2018. That's over a year away. I wonder if Carlyle
Strategic Partners IV will buy discounted PES debt. Can Carlyle backdoor Carlyle (like it did to Brintons and Mrs. Fields)?

Monday, February 20, 2017

Citizens taken apart by stagnant wages and declining benefits the last few decades provided the ecosystem for Donald Trump's White House win. Many voters don't know the President appointed billionaires to his cabinet, most are private equity underwriters (PEU) or worked on Wall Street. They've worked a system stacked in their favor (low borrowing costs, preferred taxation) to greatly increase their wealth while middle class workers took it on the chin.

Trump advisor Stephen Schwarzman is co-founder of PEU giant Blackstone Group. His 70th birthday soiree spectacularly eclipsed his 60th, which was opined to be the harbinger for the end of excess wealth and its shameless display. Despite this the good times continued rolling for the greed and leverage boys.

President Trump may tap Cerberus Capital co-founder Stephen Feinberg to retool America's Intelligence services. Cerberus played a role in the "slow motion terrorism of pirate capitalism" which devastated Lancaster, Ohio (Bloomberg).

On Wall Street, Feinberg is considered an enigma. He rarely gives
interviews and once said of private equity executives, “We try to hide
religiously.”

“If anyone at Cerberus has his picture in the paper
and a picture of his apartment, we will do more than fire that person,”
Feinberg told shareholders in 2007, according to Rolling Stone magazine. “We will kill him. The jail sentence will be worth it.”

Surely someone from Homeland Security guarded Cerberus' investor gathering and its high ranking officials former Vice President Dan Quayle and Treasury Chief John Snow. What happened to "see something, say something."

Why do billionaire private equity chiefs hide religiously to the point of threatening physical harm? It's their love of money and their endless drive to have more. How will voters wishes stack up to those of President Trump's close advisors? I expect the little people will continue getting the raw end of the deal.

Update 3-14-17: The Atlanticpicked up on how PEUs devastated Lancaster.

Wayne T. Smith, chairman and chief
executive officer of Community Health Systems, Inc., said, “This
transaction is a significant step in our strategic work to optimize our
portfolio and operations for the future. These hospitals play an
important role in their communities and can benefit from Steward Health
Care’s community-based care model going forward.”

Health care officials in Ohio, Pennsylvania and Florida will have an opportunity to ask questions about the deal. Steward's integrated care model in Massachusetts had the system selling its hospital facilities to a REIT for $1.2 billion and leasing them back. This deal returned Cerberus' initial investment in Steward and more. Cerberus made more money off Steward by charging annual management fees, deal fees and likely bled the hospital system via dividends/special distributions.

State health officials should ask about the potential impact of Steward enacting these same strategies on the eight CHS hospitals. KKR's ownership of hospital giant HCA added $15 billion in health care costs from additional interest expense and dividends alone.

Neither party has shared the price or how Steward/Cerberus plans to structure/finance the deal. CHS will need to share information with Wall Street analysts and shareholders so I expect a number will be revealed.

There are few economies of scale in having hospitals spread out over four states. However, Steward will hire more overseers for their growing healthcare plantation:

De la Torre said he didn’t expect there to be layoffs as a result of the
acquisition, though the health system will be hiring more people in
both Massachusetts and each state to help oversee the operations.

Fifty eight percent of CHS employees approved of CEO Wayne Smith. They may be disappointed to learn only eighteen percent of Steward employees approve of CEO Ralph de la Torre.

That's a 40% reduction in leadership respect. CHS employees will learn how their new boss earned this level of disdain.

In the normal course of business, our personnel have made use of aircraft owned by entities controlled by Messrs. Conway, D’Aniello and Rubenstein. Messrs. Conway, D’Aniello and Rubenstein paid for their purchases of the aircraft and bear all operating, personnel and maintenance costs associated with their operation for personal use. Payment by us for the business use of these aircraft by Messrs. Conway, D’Aniello and Rubenstein and other of our personnel is made at market rates, which during 2016 totaled $16,695 for Mr. Conway, $170,850 for Mr. D’Aniello, and $398,530 for Mr. Rubenstein. We also made payments for services and supplies relating to business use flight operations to managers of the airplanes of Messrs. D’Aniello, Conway and Rubenstein, which during 2016 aggregated $667,781 in the case of Mr. Conway’s airplane, $1,004,292 in the case of Mr. D’Aniello’s airplane and $2,795,585 in the case of Mr. Rubenstein’s airplane. Certain of these services were performed by one of our former portfolio companies, Landmark Aviation. Consistent with the terms of our agreement with Landmark Aviation, in 2016, we received payments from and made payments to Landmark Aviation to adjust the estimated annual costs of operating the aircraft related to 2015 flight operations. In 2016, we received payment from Landmark in the amount of $116,568 related to Mr. D’Aniello’s aircraft, and made payment to Landmark in the amounts of $68,850 and $111,063 related to Mr. Rubenstein’s and Mr. Conway’s aircraft, respectively.

The private equity owners of auto repair-center operator Service King Paint & Body LLC are considering a sale of the company, people with knowledge of the matter said.

Service King’s owners, Blackstone Group LP and Carlyle Group LP,
have had discussions with bankers about starting a sale process this
year, said the people, who asked not to be identified because they
weren’t authorized to speak publicly. The company could fetch more than
$2 billion, the people said.

Carlyle invested in Service King in 2012 when the company had a mere 49 Texas locations. Blackstone bought into the company in 2014 but Bloomberg couldn't find the purchase price.

Blackstone Group LP has agreed to buy a majority stake in auto-repair
shop chain Service King Collision Repair Centers from Carlyle Group LP
with a view to fund the company's future growth, according to people
familiar with the matter. The deal values Service King at about $650
million, one of the people said.

By the time Blackstone bought in Service King had 180 locations in 20 states. Carlyle and Blackstone loaded Service King with $695 million in debt according to Moody's:

The Ba3 ratings assigned to the proposed $100 million secured revolver,
$355 million senior secured term loan, and $40 million
senior secured delayed draw term loan reflect their senior position in
the capital structure, as well as the cushion provided by the proposed
$200 million senior unsecured notes, which are rated Caa1.

That ballooned to $1.1 billion as of August 2016. At those debt levels Service King had 299 locations in 23 states. Time will tell if Bloomberg's article stirs up buyout interest in Service King.

Monday, February 13, 2017

What promises to be the exceeding lavish 70th birthday party of billionaire Stephen A. Schwarzman the following weekend.

Schwarzman, the CEO and co-founder of the top private-equity
Blackstone Group, is worth $11.6 billion and was recently appointed to
head Trump’s Strategic and Policy Forum, comprised of other titans of
industry who’ve made outsourcing American jobs a point of pride.

So it’ll likely be a powerful crowd who come to sing the septuagenarian Happy Birthday

Thrive Capital, Dune Capital Management, Invesco, KKR, The Carlyle Group and Oaktree Capital were all represented at the Blackstone celebration.

Flash back a decade:

"We know Trump and Melania attended Schwarzman’s uber
luxurious 60th birthday bash in New York ten years ago that was called
“the beginning of the end of Wall Street’s gilded age.”

That's the longest beginning of the end as the 70th remained uber luxurious:

There were camels in the sand, a gondolier in the pool and a giant
birthday cake in the shape of a Chinese temple -- with Gwen Stefani on
hand to help sing Happy Birthday at midnight.

One private equity underwriter (PEU) reveled in the event:

“The world is an uncertain place, a lot of people are unhappy with a lot
of other people, there are a lot of things that people are upset
about,” said Oaktree Capital’s Marks. “So it’s nice to have an evening
where everybody’s happy, harmonious and upbeat.”

Sunday, February 12, 2017

AIG's Maurice "Hank" Greenberg settled with the New York Attorney General for $9 million for "inaccurately portraying A.I.G.’s financial results over four years." Neither Greenberg not Smith admitted to fraud. The New York AG sought over $50 million from prior bonuses with accrued interest. That means Greenberg settled for 18 cents on the dollar.

Greenberg is the latest AIG executive to pay back executive incentive compensation. Former CEO Franklin Raines settled for $24.7 million in April 2008 for his role in a six year accounting fraud.

Hank Greenberg paid a relatively small price for his "accounting inaccuracies." Five months after Franklin Raines settled, also without admitting guilt, Lehman Brothers failed. Lehman failed in part due to AIG shenanigans. What might happen five months after Hank Greenberg's settlement? Time will tell.

Update 2-13-17:WallStreetonParade took a different angle on Hank Greenberg's settlement.

Saturday, February 11, 2017

PRESUMED GUILTY is an award-winning documentary that exposes new
allegations of Swiss prosecutorial misconduct in the case connected with
Belgian Jacques de Groote, 89, a former high ranking representative of
the International Monetary Fund (IMF) and World Bank.

The case known as “MUS affaire” involves not only Swiss prosecutors,
IMF, World Bank representatives and globally recognized politicians
(i.e. former U.S. President George H.W. Bush), but also global business
structures like the Carlyle Group. The story involves capitalization of
unique historical opportunities brought by economic transition in
Central Europe after the fall of Communism in the 90s and billion dollar
fines Swiss authorities imposed on Central European entrepreneurs.

One screening will occur in Las Vegas:

On February 15, Oscar Goodman, legendary Las Vegas mayor and and
criminal defense attorney, will host a screening of PRESUMED GUILTY at
the Mob and Law Enforcement Museum.

Attending and co-hosting is political journalist and activist Chuck
Muth of Citizens Outreach and Muth’s Truths. The event begins at 5pm for
a very private screening hosted by Mayor Goodman.

Following the event will be cocktails hosted by Mayor Goodman and Chuck Muth at Oscar’s Beef Booze & Broads–Mayor Goodman’s restaurant.

Democratic Oscar Goodman united with Republican Chuck Muth in defending the big money globalist gang in Las Vegas. When he's not threatening journalists with his baseball bat Goodman may want to defend big money boys taking liberties with the law.

Jacques de Groote, the former Executive Director to the IMF (1973-1994) and World Bank
(1975-1991) for Belgium, was condemned in October 2013 by Swiss courts
in an affair concerning the fraudulent privatisation of the principal
coal mine in the Czech Republic.

His co-defendants, five Czech businessmen,
were given fines and prison sentences ranging from 36 to 52 months. The
five Czechs were found guilty of aggravated money laundering and fraud
or complicity of fraud. These verdicts punish them for the
misappropriation of assets of the Czech mining company MUS (Mosteck
Uhelna Spolecnost) from 1997 to 2003.

So how does The Carlyle Group's good name get associated with the case? It turns out Steven Norris, a Carlyle co-founder left the private equity underwriter (PEU) in 1995. WaPo reported in January 1995:

Steven Norris is starting a limited partnership called Appian Equity Partners Ltd.,
to be based in the Netherland Antilles. It will invest the funds of a
tight circle of investors -- at this point, Norris said, they include a
European bank, some U.S. pension funds and a couple of wealthy Saudi
families.

Norris will remain as a senior adviser to Carlyle and will continue to
enjoy the reportedly healthy financial return from his holdings in
Carlyle business partnerships.

The documentary trailer said de Groote "worked for" Appian Group, which had President George H. W. Bush and Lawrence Eagleberger on its board of advisors. It did not note that Appian halted fundraising in March 1999.

The Appian Group, a firm formed by Stephen Norris-the co-founder of The
Carlyle Group-has aborted fund raising for its $500 million buyout fund
and will wait until it either has found an anchor sponsor or has added
new partners.

That speaks to a crisis in the PEU world as fundraising is the lifeblood. What happened that investors did not feel comfortable funding Appian's next move?

Appian Group has come from nowhere to become one of the largest and most powerful financial groups on the Czech business scene.

Since 1998 it has acquired Mostecka Uhelna (MUS), the second
largest brown coal mine, and Skoda Holding, once the country's biggest
engineering group. Appian is also negotiating to buy Severoceske Doly,
the largest brown coal mine.

Yet Appian's origins and ownership remain unclear, while its takeover methods and lobbying power have provoked controversy.

Its rise and the rise of others like it in the region - such
as PPF in the Czech Republic and, in Slovakia, Penta Group, J&T
Group, and Istrokapital - show how secretive private financial groups
have become significant players, regularly outmanoeuvring foreign
investors.

"These groups exist everywhere but the trouble here is that
they are very influential and very closely linked to decision makers,"
says the head of a local brokerage.

That's a critical part of the PEU model, cozying up to decision makers.

Speculation over Appian's origins has focused on the group's
acquisition of MUS from the government in a hostile takeover in 1998.

Appian said it funded the acquisition from a US-registered
parent but - according to copies of documents seen by the Financial
Times - this US company later split acrimoniously, with one side
claiming that it had merely licensed the use of its name to the Czech
operation.

The true source of the funding, the state privatisation
agency alleged at the time, was that the mine's management had used its
environmental reserve fund secretly to buy up floating shares and seize
majority control from the state.

These events could've scared away investors in early 1999.

Appian
says the fund has €1bn at its disposal but it has so far not revealed
where this money comes from, declaring merely that it has international
investors.

MUS provided Appian with a stable cash flow and gave it the
ear of the incoming Social Democrats, for whom the depressed north
Bohemian coal basin is a stronghold.

Appian quickly won a reputation as a good employer, an active charity sponsor, as well as a competent manager.

When the Social Democrats privatised the almost insolvent
Skoda engineering group last year, Appian was the government's favoured
choice.

Note the Social Democrat political connection and how it benefited Appian. Oddly a storied Wall Street firm reacted to this political pressure.

J P Morgan, the government's adviser, came under heavy
political pressure to grant Appian exclusivity without a tender and it
eventually resigned.

"In any case it would have been hard for us to advise the
government to sell to a company that refused to reveal the source of its
funds."

Now that private equity is ubiquitous I wonder if J.P. Morgan would make the same decision.

Appian finally snapped up Skoda for Kc800m, with the state writing off Kc3.8bn of state-held debt.

That's one major public subsidy, another PEU hallmark. Yet another is paying fines for illegal or potentially illegal behavior.

All parties in the MUS Affair served jail time except Appian Group's President Jacques de Groote. Radio Prahareported in 2013:

The five former managers of
MUS received prison sentences ranging from just over a year to more than
four years. The 86-year-old de Groote was the only one to escape prison
and
received a fine.

The obvious Carlyle connection is Appian's start from a Carlyle Group co-founder. That hardly seems enough for Carlyle to allow their good name to be associated with this documentary.

Might Presumed Guilty actually help Carlyle facing a $1 billion Guernsey lawsuit financed by a former Carlyle Capital Corporation investor? What if the documentary discredits the man who brought the story to Swiss investigators?

1998 The fraudulent privatisation of the MUS mine in the Czech Republic begins.

1998-1999 J. de Groote becomes the President of
the Appian Group, a Swiss company based in Fribourg, specialising in
investments in the companies being privatised in Central and Eastern
Europe, particularly in the Czech Republic.

2000 A $500,000 dollar loan from Alain Aboudarham to Jacques de Groote turns bad, and their relationship becomes hostile.

2002 Alain Aboudarham puts pressure on Jacques de Groote and his Czech partners to get back his money, but is unsuccessful.

December 2004 Alain Aboudarham writes a letter to the Swiss courts to “reveal the affair.”

June 2005 Alain Aboudarham is summoned before the
Swiss courts to explain in detail his denunciation. Immediately
afterwards, the Swiss attorney general’s office (MPC) opens an
investigation.

2004 to 2006 In the United States, different courts judge the dispute between Alain Aboudarham and Jacques de Groote.

The collapse of the Carlyle fund was swift and substantial. Within just
eight months of the July 2007 offering, the company had defaulted on
over $16.6 billion of its indebtedness and had been forced into
liquidation.

It took bankruptcy trustees in Guernsey to get the case heard. Last year Carlyle got their insurors back on the hook for the Guernsey claim, should bankruptcy trustees win. Now if they can discredit the vengeful investor funding the CCC lawsuit:

A major Dutch investor lost $60 million when a Carlyle Group LP fund
collapsed in March 2008. Now, he is paying for others to sue the U.S.
private-equity firm, a high-stakes gamble that could make him hundreds
of millions of dollars.

The investor is Louis Reijtenbagh, a 70-year-old former
family doctor who became one of the Netherlands’s richest men by
investing in art, distressed debt and other assets.

And now Reijtenbagh has invested in the bankruptcy trustee suit over permanently distressed debt.

If Presumed Guilty can rescue Appian Group President Jacques de Groote by calling the lawsuit a witch hunt that could rub off on Carlyle's CCC lawsuit. Will Presumed Guilty: Part Deux tell the CCC story from Carlyle's perspective?

David Rubenstein: Fortunately, we are operating at a very favorable environment for the
alternatives industry and for Carlyle. For our fund investors, asset
prices and significant levels of distributions have increased demand to
allocate even more capital to leading alternative asset managers. We are
certainly poised to benefit from this environment and the risk of a
near-term recession seems to have dissipated.

Bill Conway: 2017 is shaping up to be a year of transition as we complete the
investments cycle for several major funds, eventually move these funds
and others into carry and raise the next generation of funds.

Curt Buser: Total hedge fund AUM at the end of the third quarter was $5.2 billion
and was zero at year-end, resulting in a decrease in assets under
management. Fee earning assets under management is expected to grow again in 2018 after raising new capital and activating the related fees.

Bill Conway: We need to make progress towards our goal of raising approximately $100
billion from 2016 to 2019. We raised about $14 billion in 2016 without
many of the biggest funds in the market and we have a lot of work in
front of us.

David Rubenstein: On the fund raising, I would add just that there are two large groups
that I may have mentioned before, are really dramatically increasing
their amount of money that they are putting into private equity and not
on other alternatives. There are the sovereign wealth funds which are
dramatically growing in size and they are coming in in very large
amounts in to our funds and other funds, our peers, and also high net
worth individuals through feeder funds or through family offices
directly. And we can see an explosion of interest from those two groups.

Curt Buser: Fund raising costs will increase in 2017 given the larger amount of
capital that we expect to raise and this will put pressure on fee
related earnings in 2017 relative to 2016, since as you know, we
generally expense all fund raising cost upon raising new capital.

A different earnings call by Lowes CEO James Tisch raised concerns about Carlyle's big plans:

The merger market is being driven by large pools of private and corporate buyers, the wave of private capital combined with the abundance of available leverage at remarkably low rates has enabled private equity firms to pay big prices for companies that haven’t already been gobbled up by strategic buyers.
In my opinion, the markets are priced for perfection, and they have been that way for quite some time, complacency reign supreme. However, my experience has shown me that this state of affairs won’t go on indefinitely.

The Carlyle call included the state of affairs for Vermillion Asset Management, one of the "closed" hedge funds.

David Rubenstein: We took a $100 million non-cash reserve last quarter related to these
losses which principally revolve around the misappropriation by third
parties of oil owned by various Vermillion investment vehicles. We are
actively pursuing remedies to recover some or all of these losses but
the amount and timing of recovery is uncertain. In the fourth quarter,
we repurchased investor interest in one of the Vermillion vehicles,
thereby resolving potential claims and acquiring rights to be reimbursed
from future recoveries.

I'm sure Carlyle Capital Corporation (CCC) investors will be intrigued by by Rubenstein's comment that Carlyle repurchased investor interest to avoid a lawsuit. The CCC investor suit in Guernsey should be closer to a ruling or settlement. Oddly, the suit was financed by a Dutch billionaire who'd invested in CCC. How will the battle of the billionaires turn out?

Tuesday, February 7, 2017

A Carlyle Group press release announced the purchase of Golden Goose Deluxe Brand, an Italian luxury lifestyle fashion company. No financial terms were disclosed

Golden Goose Deluxe Brand develops total look collections for both men
and women and caters to the needs of quality-conscious sophisticated
customers in search of a lifestyle brand that offers distinctiveness and
differentiation from the mainstream global luxury brands.

Which explains the unique description of current ownership on Carlyle's website

Today the company is controlled by Ergon Capital Partners III S.A. and
participated by Zignago Holding S.p.A., the company’s founders and the
Management tea.

Sunday, February 5, 2017

Laboratory
Corporation of America Holdings (LabCorp) is in talks to acquire
contract researcher Pharmaceutical Product Development LLC (PPD) for
more than $8 billion, including debt, people familiar with the matter
said on Friday.

Based in Wilmington, North Carolina,
PPD offers its services to biotech, pharmaceutical and medical device
companies that want to outsource research services. It focuses its
research on a wide range of therapeutic areas, ranging from
cardiovascular to urology.

The Carlyle Group and Hellman & Friedman took the company private in 2011 for $3.9 billion.

Since then Carlyle launched $4 billion in debt that included a $400 million dividend. PPD had no debt when Carlyle and company bought the company in 2011. Moody'sassessed after the 2015 PEU dividend recap.

PPD's B2 CFR rating reflects the company's very high financial leverage
and aggressive financial policies, including a significant amount
of shareholder dividends paid since the company's leveraged buyout.
The proposed dividend will increase adjusted debt/EBITDA to around 7.5x
for the twelve months ended March 30, 2015, up from 6.7x.
The ratings also reflect risks inherent in the CRO industry, which
is highly competitive, has high reliance on the pharmaceutical industry,
and is subject to cancellation risk.

Carlyle was not done with its bleeding of PPD It took on another $200 million in debt for an acquisition that surely generated deal feels.

The company
will be increasing the size of its existing term loan by $460 million.
The proceeds of the incremental term loan, along with cash on hand,
will be used to fund a $525 million dividend. The equity sponsors (Carlyle and Hellman) will have taken out more in dividends
than the original equity invested."

That does not included deal or management fees, other ways sponsors profit from affiliates. I'll venture Carlyle and its PEU brethren have stuck PPD for $2 billion.

It will be interesting to see if Labcorp wins and what information they provide about PPD in their SEC filings.

"Take AI (artificial intelligence). Why couldn't they develop AI that could do Bill Conway's job, even better than he can do it? Could it free us? Could it be a freeing kind of thing, innovation, technology? It can so improve the human condition I think frankly in ways that we don't imagine. I don't even know what they will be. Maybe life expectancy."

AI could be freeing for billionaires, but not for people who've lost their retirement funding and face the specter of job loss.

Suicides also increased significantly, although they do not account for a
large absolute share of deaths. Researchers often include both
unintentional injuries and suicides as related outcomes for people
suffering mental illness and homelessness.

How many people have been cast aside by private equity's focus on greed the last twenty fives as PEUs became ubiquitous?

I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy.
These are people took pride in their jobs and held themselves to this
invisible standard that we all just took for granted, but is being wiped
out.

The Carlyle Group scares me more than anything I've ever seen on Wall Street. It seems to exist to corrupt politicians and it's hard to know who they even represent.

President Trump's administration is chock full of private equity underwriters so this trend will not reverse soon. The PEU train believes in AI and it may run over lots of jobs before encircles the globe.

Wednesday, February 1, 2017

The Carlyle Group is ready to exit vitamin and supplement maker NBTY after six years of ownership. Reutersreported Carlyle could make $4 billion from Nature's Bounty, $1.2 billion from dividends and $2.8 billion in profits from the sale of the company.

Reuters referred to deal as an LBO in the title of the article. Private equity replaced LBO after Junk Bond King Michael Milken went to jail. Apparently both the man and his greedy methods are rehabbed and proud to be spoken as our society walks back in time. Oddly the 1989 NYT piece quotes America's newest President:

Nevertheless, many Wall Street professionals criticized the deal Drexel
had with Mr. Milken. Once his salary began to exceed the budgets of many
small countries, the firm should have altered the terms of the deal,
they said. Executives have also begun to voice concern about what the payments say
about the firm's management. ''You can be happy on a lot less money,''
said Donald J. Trump, the New York developer, whose net worth is
estimated at $1 billion. ''I'm amazed that the firm would allow someone
to benefit that greatly.''

Insider Architect of the Implosion

"I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders."--Larry Summers, Ph.D.

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